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Calgary ranks second to Canmore as most expensive housing market in Alberta

Photo: File

Joel Schlesinger, for the Calgary Herald

Published: November 30, 2018 - 3:15 PM

When it comes to housing affordability in Alberta, Calgary is near the bottom of the list.

That’s according to the findings of a new survey by a Canadian real estate broker.

Toronto-based Zoocasa recently revealed the results of its study of housing prices and income in the province. And it found Calgary ranked only behind Canmore as the most expensive real estate market in Alberta.

“We do a calculation where we determine how much as a minimum you would need to qualify for a mortgage for the average home,” says Penelope Graham, who helped author the study for Zoocasa.

“Then we determined whether the median income is sufficient to qualify, and whether is there an income surplus or income gap on top of that.”

What the broker’s research revealed was that among 25 municipalities in the province, Calgary had the second highest average price of a home (based on Calgary Real Estate Board data from October) at $468,652 while the median household income ranked 17th highest at $97,334 (Statistics Canada).

The broker then estimated the annual income required to afford a mortgage assuming a 20 per cent down payment, a 3.33 per cent interest rate and 30-year amortization. In Calgary, that amounted to $63,925 in mortgage costs annually, which was the third most costly in Alberta.

Based on these numbers, the study found the average household in the city would have a $33,408 income surplus after mortgage costs.

By comparison Canmore was the most costly municipality by a longshot. Its average home was $696,421 — tops in the province. As for income, the average household in the mountain city was $98,906, the 15th highest in Alberta.

Based on these numbers the average household would require $94,998 of annual income to cover minimum mortgage costs, leaving about $3,908 left over at the end of the year.

Graham says the survey is the first of its kind in Alberta, though the broker has done similar studies for British Columbia and Ontario in recent weeks.

“Alberta is quite unique among the provinces,” she adds. “In every market for Alberta if you earned the median income as a household, you would have sufficient income to qualify for a mortgage on the average home, and you’d have a surplus on top of that.”

In contrast, the median household income in Vancouver is about $97,000 less than the annual mortgage costs required for the average home, which costs more than $1 million.

“In Toronto and surrounding suburb called Richmond Hill — the top two municipalities in Ontario — they both had a gap of about $50,000.”

While Calgary sat near the top of the list as the most pricey jurisdictions in Alberta, Fort McMurray turned out to be the most affordable. The average home price there was $373,360 with a mortgage cost of about $51,066 and a median income of $195,656.

“There, households are looking at a surplus that is over $140,000.”

Graham adds, broadly speaking, Albertans have the most buyer-friendly real estate markets among the three provinces.

“For all markets to have surpluses across, well, that just shows how affordable housing is in the province.”